1998 (3) TMI 533 - HC - Companies Law

Summary

Issues:
1. Quashment of order under section 482 of the Criminal Procedure Code.
2. Interpretation of section 630 of the Companies Act, 1956 regarding legal heirs' liability.
3. Conflict of decisions between various High Courts.
4. Applicability of Supreme Court's decision in Smt. Abhilash Vinodkumar Jain v. Cox & Kings (India) Ltd.

Analysis:
The petitioner, a public limited company, sought quashment of the order passed by the Sessions Judge, Dewas, in a complaint against the respondent under section 630 of the Companies Act, 1956. The complaint alleged that the respondent, widow of a deceased employee of the company, failed to hand over possession of the premises allotted to her husband. The Chief Judicial Magistrate and the Sessions Court both dismissed the complaint, holding that section 630 does not allow criminal proceedings against relatives of former employees for property recovery, citing Beharilal v. Binod Mills Co. Ltd. [1987] Bank J 621. The key issue was whether a complaint under section 630 could be filed against legal heirs of a deceased employee for property recovery.

The High Court noted conflicting views on this issue, with the Calcutta High Court and the Bombay High Court differing from the decision in Beharilal's case. The matter was ultimately resolved by the Supreme Court in Smt. Abhilash Vinodkumar Jain v. Cox & Kings (India) Ltd. [1995] 84 Comp. Cas. 281, where it was held that a complaint under section 630 is maintainable against legal heirs for retrieval of the company's property wrongfully withheld after the employee's demise. This decision overruled Beharilal's case, establishing the legal position that such complaints are permissible against legal heirs.

The High Court emphasized that the factual ownership of the property was not within its purview, as the decision was based solely on the complaint's maintainability. The Court allowed the petition, quashing the lower court orders, and directed the case to proceed before the Chief Judicial Magistrate in accordance with the law. The judgment clarified the legal stance on section 630 and the liability of legal heirs in such cases, aligning with the Supreme Court's authoritative interpretation in Smt. Abhilash Vinodkumar Jain's case.